AOL Looks to Bring More Web-Like Direct Response Ads to TV With New Patent

As part of its push into programmatic ad-buying, AOL hopes one day to help facilitate the automation of TV advertising sales market. With that in mind, AOL has patented a new ad-service aimed at helping TV advertising work more like the Web.

Specifically, AOL claims its new service will let advertisers gauge whether TV ads are driving people to the Web, the phone or into stores to make purchases. The Web portal is betting that it can attract a whole new breed of smaller, direct-response-oriented brands to the tube, using AOL’s automated systems to place their ad buys.

The company contends that unlike online advertising, where brands commonly track the impact of ad placements down to individual sales, TV advertisers are in the dark about the effectiveness of TV advertising, a condition that Brendan Kitts, Chief Scientist for AOL’s programmatic selling platform Adap.tv, calls “an unsolvable labyrinth for advertisers.”

However, 60 years of marketers advertising on TV, and the current $70 billion TV ad market says Mr. Kitts is wrong. He argues that advertisers essentially continue to spend money on TV using a combination of guesswork and fear.

“Yes it’s true that when you a brand stops doing TV you see sales go down,” said Mr. Kitts. “But they have difficulty measuring what TV is doing, and which component of TV driving biggest results.”

This is where AOL could help. Mr. Kitts claims that Adap.tv will now be able help advertisers cherry pick particularly TV show airings that should drive the healthiest return on investment. How? Well AOL says it has signed up several cable providers to provide set top box data, though it won’ t say who.

AOL says it combines that set top data with lots of other data, including first party data from brands, consumer profiles researchers and aggregators like Experian and Rentrak, along with shopping data from researchers like IRI.

Then, AOL’s proprietary, patented “machine-­‐learning system” as the Mr. Kitts calls it, crunches all that data and tries to figure out which online or real world conversions can be credited to a particularly TV campaign. The system is also able to filter out conversions that shouldn’t be credited to a TV campaign (such as when a person shops on their favorite retailer’s site because they just wanted a new outfit).

“You need to be able to filter out what is driving activity from noise,” said Mr. Kitts.

Speaking of noise, AOL’s new offering may meet all sorts of skepticism in the TV world, considering the fact that in spite of TV ratings, the overall ad market is still fairly solid. Plus, just how it works (of course, there’s an algorithm involved) is awfully hard to understand, even for the average marketer. And there’s the question of whether it’s even logical that specific TV show airings will somehow drive more ad conversions than others.

Plus, AOL isn’t even saying what TV networks or cable providers are involved in this initiative. Not to mention that other big tech companies, such as Google and Microsoft, have struggled gain traction in this arena.

Still, AOL has attracted a set of advertisers, including brands like the e-commerce firm Art.com, which are new to TV.

“For companies like ours, real direct to consumer brands, it’s always been hard to justify above the line advertising,” said Art.com’s Senior Vice President of Marketing Lesa Musatto. “Procter and Gamble approaches this differently than a pure direct marketer. This now allows us to actually play in the brand advertising space. It’s marries Web advertising and TV.”

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